BRITAIN'S wealthiest have seen their fortunes increased further by the Bank of England's economy-boosting efforts, while many pension funds have suffered, a new report revealed today.

The central bank has come under fire from politicians, the pension fund industry and lobby groups, claiming that the ultra-loose quantitative easing policy was hurting pensioners' and savers' income because of ultra-low rates.

In a response to a request from parliamentarians to look into the distributional effects of its policy to buy assets with newly created money, the Bank issued a report defending it's policy and dismissing accusations that it has made pension savers worse off.

In it's response the Bank justified it's £375 billion quantitative easing
experiment, which was launched in the wake of the financial crisis, but admitted the strategy had benefited some more than others.

Most people would have been worse off without this response, including savers and pensioners

Bank of England

Although the report showed that the programme has increased total household
wealth by 16 per cent, or £600 billion, the richest households - holding around 40 per cent of these assets - are shown to have benefited predominantly.

The report also revealed that pension
funds with hefty shortfalls will have seen their deficits increased
further.

Money-printing policy has been attacked for triggering "a death spiral"
in pensions, which some experts say has led to the worst retirement
payouts in history.

However, the Bank said quantitative easing has helped the UK avoid an even worse economic battering and that the effect on those preparing to retire has been “broadly neutral”.

The pension income of those already in receipt of a pension
before asset purchases began have not been affected by quantitative
easing and the same is true for the retirement incomes of people coming
up to retirement in a defined benefit pension scheme, the Bank asserted.

The Bank said: "Most people in the United Kingdom would have been worse off without this response, including savers and pensioners."

It said: "Economic growth would have been lower. Unemployment would have been higher. Many more companies would have gone out of business.

"This would have had a significant detrimental impact on savers and pensioners along with every other group in our society."

The central bank has launched another round of quantitative easing in July, planning to buy 50 billion pounds of assets until November.

Meanwhile, plans to improve transparency over pension charges to help boost confidence in the system have been announced by insurers.

The Association of British Insurers (ABI) wants to develop an industry protocol by the end of the year to ensure that all workers receive regular, clear and meaningful information about costs as their funds build up, which would also help them to compare schemes more easily.

It said that for "too long" people have not had enough information about what they are paying and greater transparency about costs would encourage them to remain in pensions.

The call comes just weeks before the Government's landmark initiative to automatically enrol up to 10 million people into workplace pensions, starting in October with larger firms, amid concerns that people are not putting aside enough for their later years.

The pensions system was criticised by the Institute of Directors in April, which said that it must be radically simplified, as it is being bogged down by a "forest of regulation" which is putting people off.